Contrary to wide-spread speculation, tensions in the South China Sea did not peak after the July 12 ruling by the arbitral tribunal: so far, China has not announced the creation of a South China Sea Air Defense Identification Zone, nor has it started the land reclamation of the Scarborough Shoal. Both had been anticipated as highly likely, and highly destabilising, reactions from China in response to the unfavourable ruling.
In China’s view, such a ruling was expected (although Beijing did not necessarily foresee such a landslide victory for the Philippines). However, key factors, especially the attitudes of the United States and the new Duterte administration in the Philippines, played an important role in China’s reaction to the ruling.
Understanding that the ruling would not favour China’s position, Beijing had crafted and circulated its “Four No’s” policy long before the ruling was announced -“no participation, no acceptance, no recognition, and no implementation.” While non-Chinese legal experts have argued that the ruling would be “binding” regardless of whether China acquiesces to be bound by it, people understand that the significance of the ruling would be more legal, symbolic and political rather than material or military. Therefore, for Beijing, as long as its de facto control of the artificial islands and maritime areas is not affected, the ruling itself will not change the status quo in the South China Sea in the near term.
The other side of the same judgement is that a legal and political issue should first of all be responded to through legal and political means. China rallied a tremendous campaign to attack the legality and credibility of the arbitral tribunal itself. One of the campaign’s central arguments is that the tribunal itself is not related to the International Court of Justice, and the Permanent Court of Arbitration, which the tribunal is associated with, is not a part of the UN system. Furthermore, China has attacked the impartiality of the tribunal given the selection of the judges (made by Japanese Judge Shunji Yanai) and the source of its funding (from the Philippines).
Despite these loud and seemingly reasonable arguments, it is well understood in China that it has almost entirely and irreversibly lost the battle on the legality of its nine-dashed line, artificial islands, exclusive economic zones and historical rights arguments. No matter how Chinese officials and experts attack the case and the tribunal itself, the ruling of 12 July will have a profound and long-lasting impact on future Chinese actions and the settlement of the dispute, if any. The ruling will be constantly and widely referred to and used as the legal foundation for other nations’ interpretation of international law and actions. China can stop the ruling from being enforced, but it cannot force other countries to embrace its positions. In the long run, China’s imposition will be counter-productive.
Yet in the short term, China may not perceive the ruling as a failure, provided it doesn’t precipitate an immediate change to the status quo. China’s largest concern on the ground has always been how the United States will “interfere” in the South China Sea. This is because the US is regarded as the only party in the region with not only the capacity to challenge China’s position in the South China Sea, but also the will to do so. The three freedom of navigation operations by the US since 2015, as well as Washington’s support for the ruling by the arbitral tribunal, all served as evidence to China that the US intends to curtail China’s ambitions within the first island chain.
Many Chinese analysts speculated that the US would exploit the unfavourable ruling for China and consequently enhance its military presence in the South China Sea. In their view, the ruling would embolden Manila, pushing it to seek closer military cooperation with the US, including but not limited to arms sales or even joint patrols of the disputed areas. There has been a major concern in China that the US would take action to enforce the ruling or, at a minimum, to counter China’s presence in the disputed areas.
Interestingly, such anticipated American moves have not yet taken place. The official US position remains unchanged: to support the rule of law and urge all claimants to avoid provocative statements or actions. No freedom of navigation operations have been announced or conducted since the ruling was released. China participated in the multinational maritime exercise RIMPAC 2016, which for Beijing confirmed Washington’s desire to keep the military-to-military exchanges open, to manage tension and to avoid conflicts. Such confidence had existed more or less since the two militaries signed the agreement on military air and naval encounters in the South China Sea a year ago. However, the US actions this year, and the importance attached to the ruling before 12 July raised key questions in China about whether Washington intended to continue to abide by the agreement.
Another factor that has made China more comfortable about its stance in the South China Sea is the changing domestic politics in the Philippines. It is not a secret that the new Duterte administration is interested in soliciting Chinese support for its domestic economic agenda, and the ruling itself will most likely be used as a bargaining chip. Since Manila’s position has softened and become more open to negotiation, China is more than willing to put forward the economic charm needed to improve bilateral relations. As long as Beijing and Manila appear reconciled and cooperative, any criticisms associated with the ruling by outsiders will be much less credible or effective.
The game in the South China Sea might have come to some temporarily stabilised standoff for the time being, but it is far from over. We are lucky that the 12 July ruling did not lead to a disastrous outbreak of conflict, although the sword of Damocles will continue to hang over the horizon.
This article originally appeared in Asia & the Pacific Policy Society’s Policy Forum, on August 10, 2016.